For the longest time, only 2 percent of Americans were using self-directed IRAs to grow their wealth. It seemed to be the best-kept secret, but that secret appears to be getting out.
The Motley Fool
, a news source known for reporting on more traditional investment options such as stocks and bonds, recently featured an online posting
about self-directed IRAs and whether they’re the right option for those who aren’t satisfied with putting their savings into stock or bond options. The article signifies the self-directed IRA’s move into the mainstream investment mindset as more people realize the flexibility and tax advantages this strategy can offer.
The article provides a fair assessment of the self-directed IRA’s pros and cons and the instances in which it could be a beneficial retirement savings tool.
An advisor’s idea of diversification – a lengthy list of fund offerings – might be a little different than what you had in mind. The great thing about self-directed IRAs is that you can truly diversify your investments by investing in things you know – real estate, tax liens, private placements and more are within the realm of possibilities.
Self-directed IRAs have their limits, and it’s in your best interest to be aware of them:
Self-directed IRAs have a unique set of rules that spell out the types of investments you can make. Being aware of these rules will help you save on taxes and potential penalties.
You can’t open a self-directed IRA at just any broker:
Only specifically qualified self-directed IRA custodians can provide this type of account. In addition, many advisors aren’t even aware of the option to self-direct IRAs, so the concept is just beginning to catch on for a lot of people. But many of the investors who have been using the accounts have experienced the power of truly diversifying their retirement accounts and profiting from their areas of expertise.
Is a self-directed IRA or other retirement account right for you? Schedule a free one-on-one IRA checkup
with one of our Senior Account Executives so you can determine for yourself if you’d benefit from this strategy.